Abstract: The research subject is the problem of a borrower’s life and health insurance as a security element of a credit agreement (personal insurance contract). The author studies the effectiveness of insurance as a security measure, guaranteeing the performance of obligations by the parties to a consumer loan agreement, and analyzes the problems of application of such measures. The author analyzes the factual goals of a personal insurance contract, which don’t correspond with the goals of this type of contracts if used for the purpose of a consumer loan obtaining. The research methodology includes the analysis of law enforcement practice in the disputes over the nullification of the insurance conditions of credit agreements and the dissolution of credit agreements, based on the comparative-legal and the logical methods, analysis and synthesis. The problems under study are vivid in the law enforcement practice connected with the provision of the freedom of citizens in deciding over the conclusion of insurance contracts. The author concludes that at the present time, there’s no standardized judicial practice in this category of disputes; often courts pass contradictious judgements on alike issues.